Blockchain Technology: Applications, Working Mechanism, and Future

This report provides an in-depth analysis of blockchain technology, including its applications, working mechanism, and future prospects. It discusses how blockchain ensures confidentiality, integrity, and availability of data. The report also highlights the capabilities and limitations of blockchain technology.

IS SECURITY AND RISK
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Introduction of Blockchain technology...................................................................................1
2. The working mechanism of blockchain...................................................................................1
3. Application the blockchain can support..................................................................................3
4. demonstrate how the confidentiality, integrity and availability (CIA) can be achieved using
the Blockchain.............................................................................................................................4
5. Discuss the support hashing technique provides in the implementation of the blocks in the
blockchain....................................................................................................................................5
6. Highlight the capabilities and limitations of blockchain technology......................................5
7. Discuss the future block chain technology within banking industry.......................................6
CONCLUSION................................................................................................................................7
8. Summary of report...................................................................................................................7
REREFENCES................................................................................................................................8

INTRODUCTION
Today most of the organizations are focusing upon using Information systems in order to
ease their work. Due to advancement in technology risk associated with information systems is
also increasing (Behnke and Janssen, 2020). It has become increasingly important for
organizations to focus upon security of their information, data and especially data related to
financial transactions done. Due to increasing ease in accessing advance technology financial
theft or data theft has increasing drastically. In order to decrease this theft many organizations
are working on developing such IS system with the help of which all kinds of information, data
hacking can be reduced. One of those technologies is Blockchain. This report will lay emphasis
upon Blockchain, its applications, CIA in blockchain, hashing technique, limitations, capabilities
and future of blockchain technology.
MAIN BODY
1. Introduction of Blockchain technology
Blockchain technology can be defined as a kind of structure that stores all kinds of
transactional records that are also known as blocks of public in several distributed databases
which is also known as a chain in a network connected though peer- to- peer nodes. This
technology is also known as digital ledger (Hofmann, Strewe and Bosia, 2017). Each and every
transaction within this digital ledger is authorized by digital signature of the owner. This digital
signature helps in safeguarding transactions and works as an authentication for the transactions
so that it can be protected from any kind of tempering because of which all the information
stored within this digital ledger is highly secure. Each transaction done in this is also verified by
several other parties of the system. All the information stored within digital ledger is distributed
all over the network because of which information stored within it becomes incorruptible. This
blockchain technology first came into lime light in 1991 when two researchers wanted to
implement a system in which all the document timestamp cannot be tampered. In 2009 first real
world application of blockchain was implemented ‘Bitcoin’. Blockchain is the main technology
behind Bitcoin. Bitcoin’s pseudonymous creator Satoshi Nakamoto referred it as new electronic
cash system that’s fully peer-to-peer, with no trusted third party.
2. The working mechanism of blockchain
In recent years usage of Blockchain has increased drastically and it is being used globally
by various organizations. But it is important to understand ways in which blockchain technology
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works. Blockchain is a kind of chain of blocks that helps in carrying various kinds of
information. In order to secure this information stored within blocks, cryptographic hashing
technique is used in which cryptographic hash of one block is stored within its next block
(Woodside, Augustine Jr and Giberson, 2017). This helps in providing a cryptographic proof for
the transaction or data stored instead of trust of third- party trust. It has a simple design and
working mechanism because of which it becomes difficult to temper with the data and reduce its
vulnerabilities to hacking, they or tempering. Blockchain has a decentralized system in which all
the data is stored within a distributed database i.e. all the systems that are connected with
blockchain stores data. Each node consist of data of previous node and before storing any new
data to the chain it is first of all verified publicly, only after that it is added to the chain.
Figure 1 mechanism of transactions that are based upon Blockchain
Due to this distributed system database all the records, transactions and data transferred
between two or more than two parties can be stored safely and securely. Working mechanism of
Blockchain consist of few main technologies: cryptographic keys, peer- to- peer network. In
order to safely store the data, it uses hashing technique which is a simple mathematical technique
which not only helps in maintaining chain of blocks but it also helps in validating the data and its
accuracy. This technique is known as cryptographic keys. peer- to- peer network of nodes is
another technique which is used for storage of data securely (Chen and et. al., 2018). Node can
be defined as a kind of system that uses Blockchain and is connected to the network. It is known
as a peer- to- peer network because each note is connected to another node. All the transactions
done between two parties are verified with the help of all the system present within the network.
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When a transaction is being done its copy is sorted within the network so that the new node can
be get connected to the peer- to- peer network on Blockchain. This helps in increasing the
security of the data stored but it also makes blockchain a bit inflexible because once the data is
stored within the network it cannot be changed. If the data is required to be altered then
conformation from many systems present within the network is required. But this functionality of
Blockchain also makes it trustworthy and dependent technology upon which organizations can
depend and complete their transactions as chances of financial frauds or tempering of financial
data chances can be reduced.
3. Application the blockchain can support
Application of blockchain has gone beyond Bitcoin. Ability of Blockchain of making
transactions or data storage much more transparent with complete fairness has increased its
usage within business. It is being used in variety of ways within business in order to save money
and make business more effective and efficient. Some of the most commonly used applications
are:
 Smart contract: It is most common upcoming application of Blockchain which is being used
by the organization. It is like regular contracts but with one difference i.e. these contracts are
enforced in real time in Blockchain (Niranjanamurthy, Nithya and Jagannatha, 2019). This
application helps in removing the middle man and increases accountability for all the parties
involved within a business. These contracts became more popular when government,
healthcare and the real estate industry discovered its benefits
 Cloud storage: It is another application of Blockchain which is becoming increasing
population. Another most important application of Blockchain is cloud storage. There are
various kinds of organization who are focusing on using Blockchain as a source of cloud
storage as it provides 300 times excess storage space as compared to traditional storage
space. It also helps the organizations to reduce their storage cost and time that they spend
upon the storage of their information and data. From has been analysed that today
organizations spend more than 10 percent of their spending on storing data. This application
has been one of the most useful application which is becoming increasing popular within the
organizations.
 Supply chain communications and proof of provenance: most of the organization today
lack transparency and communication within their supply chain and logistics. More than 50
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percent of organizations faces issues within their shipping of logistics. Various kinds of
research have explained that with the help of Blockchain these logistics and supply chain
issues can be reduced. As blockchain helps in increasing transparency it can be used as a
trustworthy source of truth and effective communication. With the help of this process
logistics process can be made leaner and more automated. It is not only a safe option but is a
cost- effective option for organization in order to bring improvement within their supply
chain system. Other than this, organizations can also use this technology for making effective
e payments and paying their suppliers and if any kind of digital contract is required to be
made then it can be done with the help of this technology.
 Voting mechanism: most surprisingly this technology can be used for bringing improvement
within voting mechanism for government. Some of the government like Illinois are already
using this technology for secure government documents, as a voting mechanism and for
many other purposes (Rifi and et. al., 2017). It can be used as a mobile voting platform which
runs on Blockchain. It is one of the most effective and secure application of Blockchain as it
uses encrypted biometric security system to increase security of voting without fear of
hacking and will also help in preserving ownership of the content i.e. corruption. This
technology can also be used by people who are eligible for voting but are travelling due to
some reason.
 Media Application: media is one of those industry that suffers and has to deal with data
privacy, royalty payments and piracy of intellectual property issues quite frequently. Media is
required to share data, information or content to large population by keeping in mind all
kinds of copyright issues. Blockchain can become strength for media and can help in
preventing digital assets of media. There are various media organization that are using
blockchain as a technology for the same purpose, who are using blockchain-based
advertising and data solution for digital marketers.
4. demonstrate how the confidentiality, integrity and availability (CIA) can be achieved using the
Blockchain
Today usage of Blockchain has increased tremendously. Many organizations globally are
using this technology because of security purpose. There are three main categories that helps in
achieving complete security, these are known as CIA (confidentiality, integrity and availability).
Many technologies do provide confidentiality and makes information available 24*7 but are not
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100 percent secure and have issues because of which many times security issues arise.
Blockchain is a secure and effective technology and is one of those technologies that provides
availability of data, integrate the data but confidentiality of data is achieved partiality. All the
transactions or data stored within blockchain is stored within each block with the help of hashing
technique (Daniel and et. al., 2017). Due to decentralized system all the data stored within it is
transparent because of which confidentiality aspect is not so strong but due to peer- to- peer
network availability of data increases. All the blocks are linked to each other with the help of
hash because of which integrity of data elements is also achieved in a much more easy and
appropriate manner.
5. Discuss the support hashing technique provides in the implementation of the blocks in the
blockchain
Hasting technique is a kind of technique which is used as main technique of Blockchain
which is used to store information of previous block so that a chain of clocks is connected.
Hashing technique also helps Blockchain to browse data backwards. As one block has its own
hash and stores hash of previous block so that a strong chain of clocks is created.
Figure 2 hashing Technique in Blockchain
Hash is an outcome of hashing function. This technique is used in blockchain so that
overall security of Blockchain can be increased by achieving integrity and availability of data.
6. Highlight the capabilities and limitations of blockchain technology
There are various kinds of capabilities as well as limitations of blockchain technology.
Some of the capabilities of blockchain technology are: It has a decentralized system because of
which hacking of Blockchain and data stored within it becomes extremely difficult (Clauson and
et. al., 2018). This also helps in removing middle third party because of which overall security of
the system increases. Its decentralized system also has a benefit i.e. it helps in reducing chances
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of failure and increase owner’s control over the data. There is no need of a third middle part who
and increases transparency between all the parties involved within the transaction of data
exchange.
Limitations of blockchain technology are: Due to increased transparency of data there is
no confidentiality or privacy of data. In terms of financial data excess transparency is one of the
main disadvantages. Although it might be an asset for supply chain and logistics bot for other
financial purposes it is a loss. Another limitation of Blockchain is its limited flexibility in terms
of change in stored data. In Blockchain there is no place of errors done by human when it comes
to data storage within Blockchain (Clauson and et. al., 2018). If any kind of error occurs while
storing the data then it becomes quite difficult for to chance and correct the data stored.
7. Discuss the future block chain technology within banking industry.
Block chain technology is mainly act as decentralized system for documenting and recording the
transaction in which take place involved particular digital currency. In the simplest way, it can be
used as transaction process that mainly identify the copies across each member of computer
within network (Lindman, Tuunainen and Rossi, 2017). In fact, it also distributed across each
part of network. Afterwards, it will be providing the facilities in term of security through
blockchain.
In future, Block chain technology has rapidly growing the area of business companies
across the global world. As possible that block chain technology will ultimately be seen as the
most innovation which come out of cryptocurrency (Lindman, Tuunainen and Rossi, 2017).
Furthermore, it can be identified that block chain technology can disrupt traditional
banking and worth taking note of some other institution. A large number of banking industry use
block chain technology that mainly used as payment system. Bitcoin and other cryptocurrencies
act both digital money and use method to transfer payment in quickly manner. The transaction
require the proper internet connection and take place instantly (Guo and Liang, 2016). While it is
true that easily conform the transaction. It provide the protection to secure a large amount of data
or information. For Example- potential consumers are generally utilise banks to hold the deposits
in saving and checking accounts effectively. Once if person deposit money into bank account,
load is most if it through reserve banking. As a result, bank failed when many consumer attempt
to withdraw at same time. At that time block chain technology support for representing the
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account entries. It could come to represent on block chain which making them more secure,
cheap to maintain and accessible.
CONCLUSION
8. Summary of report
The report is mainly focused on the information technology which consider as technological
system that always support for collecting large amount of information or data. The
documentation has described about the block chain technology, its working activities,
applications, achievement and hashing support. Block chain technology is consider as important
concept which plays significant role in banking industry. It can be distributed the database of
large records in the form digital format (Risius and Spohrer, 2017). It has been executed the
different transaction process for transferred payment from one device to another. In order to
validate and verify the correct information. Therefore, it can easily help for protecting sensitive
transaction details from other unauthorised person. Furthermore, it has identified that working
activities of block chain technology (Lindman, Tuunainen and Rossi, 2017). On the other hand, it
has summarised that block chain technology being taken seriously within financial sector as it
may prove as great disrupter to the traditional banking industry. In this way, it can be highlights
the limitation and capabilities of block chain technology.
It became obvious thing that block chain technology much more than cryptocurrencies.
Moreover, sometimes, block chain technology has been demonstrated with confidentiality,
availability, integrity that can be achieved in banking industry.
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REREFENCES
Books and Journals
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Chen, W., and et. al., 2018, April. Detecting ponzi schemes on ethereum: Towards healthier
blockchain technology. In Proceedings of the 2018 World Wide Web Conference (pp.
1409-1418).
Clauson, K.A., and et. al., 2018. Leveraging blockchain technology to enhance supply chain
management in healthcare. Blockchain in healthcare today.
Daniel, J., and et. al., 2017. Blockchain technology, cognitive computing, and healthcare
innovations. Journal of Advances in Information Technology Vol, 8(3).
Guo, Y. and Liang, C., 2016. Blockchain application and outlook in the banking
industry. Financial Innovation. 2(1). p.24.
Hofmann, E., Strewe, U.M. and Bosia, N., 2017. Supply chain finance and blockchain
technology: the case of reverse securitisation. Springer.
Lindman, J., Tuunainen, V.K. and Rossi, M., 2017. Opportunities and risks of Blockchain
Technologies–a research agenda.
Niranjanamurthy, M., Nithya, B.N. and Jagannatha, S., 2019. Analysis of blockchain technology:
pros, cons and SWOT. Cluster Computing, 22(6), pp.14743-14757.
Rifi, N., and et. al., 2017, October. Towards using blockchain technology for eHealth data access
management. In 2017 Fourth International Conference on Advances in Biomedical
Engineering (ICABME) (pp. 1-4). IEEE.
Risius, M. and Spohrer, K., 2017. A blockchain research framework. Business & Information
Systems Engineering. 59(6). pp.385-409.
Woodside, J.M., Augustine Jr, F.K. and Giberson, W., 2017. Blockchain technology adoption
status and strategies. Journal of International Technology and Information
Management, 26(2), pp.65-93.
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